Fashion retailers and brands are among the UK retailers set to see overseas online sales soar sevenfold to £28bn by 2020, according to new research.
Britain’s Retail e-mpire, published by analysts OC&C and Google, predicts that international sales will outpace domestic growth to make up 40% of total online sales in the next seven years. Last year, online sales from outside the UK totalled £4bn and accounted for 14% of total online sales.
Sales are expected to be particularly strong in Western Europe, which are predicted to rise from £1.5bn to £9.8bn in the next seven years, due to lower barriers to entry, thanks to the European Union, and the ease of delivery across the continent.
Sales are also expected to grow in central and Eastern Europe, and Asia, although North America will remain the biggest single regional market for British products online. Sales in North America are forecast to grow from just under £1bn last year to £2.7bn by 2020, although the growth rate will be slower due to the maturity of the market and stronger domestic brands.
Anita Balchandani, partner at OC&C, said the growth of international sales suggested a fundamental shift in shopping patterns with consumers using the internet as a “global shop window”, and she added that this is changing the rules of international expansion.
“Retailers are expanding internationally much more quickly now, achieving it in months rather than years, and they are also able to do it much more cheaply now,” she said.
Those who are able to best respond to the challenges of international commerce tend to be more data driven, have greater local insight about the need to tweak their offer for some markets, and have the ability to manage the currency flow.
Of the brands scoring the most consumer searches, over half are fashion brands or retailers with Asos taking the top spot and Burberry, Boohoo, Net a Porter and Jimmy Choo also in the top ten. Smaller UK brands and businesses, such as Isabella Oliver and Farfetch, are also seizing the international opportunities offered by ecommerce, accounting for nearly half of online searches from abroad.
Looking ahead, the report outlines five traits that it believes winning retailers will have: a great proposition; ability to spot and respond to fast evolving demand; cost effective routes to build awareness and customer volumes; selective and resource-light localisation and mastery of the order economic and mechanics to create profitable customer behaviour.